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Proof of Corruption in International Commercial Arbitration: A Commentary on the ICC Award 12732 of February 2007

The commentary argues against a first glance reading of the International Chamber of Commerce Arbitral Award 12732 of 2007, some extracts of which are recently published in 2010; and which might conclude to the refusal to strengthen proof required to establish alleged corruption in international arbitration, in application of the English rule of ‘Balance of Probability’. Majority of earlier arbitral case-law support the toughening doctrine, requiring ‘clear and convincing’ evidence; this is at least when the US counterpart rule of ‘Preponderance of Evidence’ was found applicable (e.g., ICC Awards 5622, 6401).

The commentary concludes after analysis of relative English case-law (In Re H (A Minor) [1996] AC 563, and In re. Dellow's Will Trusts [1964] 1 W.L.R. 451) and scholarship to the fact that modern application of the ‘Balance of Probability’ rule takes into consideration ‘seriousness’ of allegations in civil litigation when determining required supporting evidence, i.e., the English rule is not much different than that of the US rule of ‘Preponderance of Evidence’, and which strengthens evidence in case of serious allegations in civil litigation, requiring extension usual evidence to that of ‘cogent’ strength.

The commentary conclusions are supported by the fact that modern law of evidence is based on both freedom of evidence and law of probabilities. And, since the allegation of corruption, actually claims an event that is among the most serious, obscure, and least probable events, that can be met in the probabilities of everyday life, therefore it is logical to require a higher level in its standard of proof, i.e., strengthening its standard of proof.

Adding the fact that the Civil Law system rule of ‘Inner Conviction’ also leads to the same conclusion, i.e., strengthening standard of proof required to establish serious allegations, the commentary supports an emerging unified transnational rule to this effect; i.e., applying the strengthening doctrine regardless any applicable domestic rule of law.

In all cases, strengthening standard of proof should not be mixed with the standard of proof required to establish criminal culpability in criminal litigation, and which requires evidence in the level of ‘beyond reasonable doubt’.

The commentary also noted that the ICC Award 12732 is traditional in its application of national applicable rules to matters of evidence (i.e., in terminology of private international law, follows ‘conflictual methodology’), this is when it dealt with the issue of ‘standard of proof’; it however resorted in two other aspects of proof to case-law without referring to any applicable national rules or law, (i.e., followed ‘material methodology’); this is when it followed arbitral case-law on the two issues of ‘burden of proof’, and ‘admission of circumstantial evidence’.

The ICC Award 12732 is therefore classified among useful few published awards that will help develop the law of evidence in matters of corruption in international arbitration.

Victims of corruption should not however dismay the conclusion of the commentary, since other legal remedies are still available to support their stand against corruption, namely under the theories of contract and that of invalid transactions, i.e., when establishing corruption proves difficult, the victim can ask his corrupted opponent to prove a contractual performance in order to substantiate that latter’s claim (i.e., applying the ‘theory of contract’), or submitting defence of vice of consent (e.g., mistake or fraud) against such a claim in order to get discharged (i.e., applying the theory of ‘invalid transactions’). Of course, requirements and implications are different along the application of each theory.

Issues of corruption will usually affect three aspects of the law of evidence: first, the possible ‘adverse effect’ to the rule of burden of proof; second, the permission of indirect evidence (e.g., ‘circumstantial evidence’); and third, strengthening standard of proof in case of serious allegations. The ICC Award 12732 did not contribute to the first, was banal on the second, but unique on the third.